The Emergence of IWMS (Independent Workforce Management Solutions)?

August 3, 2014
by:
Andrew Karpie

Over the past two years, we have defined Online Staffing Platforms as follows:

Online Staffing - an online platform model that enables specific hirers and specific (typically contingent) workers to enter into, complete, and transact work arrangements. There is a direct (contractual/legal) relationship between hirer and worker, which the platform enables.

The most recent SIA landscape analysis of Online Staffing Platforms leaves no doubt that there are now over 150 such platforms operating across the globe. Almost all of these platforms have exhibited the defining-characteristic business model of being two-sided, many-to-many “labor marketplaces,” with actual buyers and suppliers of contingent/freelance work registered as platform users. By most measures, the largest of these platforms, Elance-oDesk, supports work arrangement transactions that can potentially occur between its nearly 3 million registered (mainly small) businesses and more than 8 million registered freelancers all over the world. This is what we have called the “(freelancer) marketplace model” in the Online Staffing Platform category. Work arrangement transactions are freely initiated and completed by buying and supplying parties, and the platform earns a transaction fee (typically a percent of the total transaction value) for being the “market-maker” and enabling the work arrangement life-cycle (from labor buyer/seller search/find, all the way to pay for the work).

Over the past few years, however, some platform providers have offered up another model (I’ve informally dubbed “Independent Workforce Management Solutions” or IWMS). In this model, individual businesses can have “private use” of the platform technology (and additional, sometimes optional, services) in order to manage work arrangements with the individual independent workers that they routinely engage. The work engagements are typically limited projects or recurring or sporadic on-demand activities performed by independent workers (not employees of the business). These can be workers that work on-site at the business’ location, at a designated location outside of business, or (as remote/online knowledge workers) at a location of their choosing.

Examples of platform providers/offerings that seem to be/may perhaps be encompassed in this emerging category of Independent Workforce Management Solutions/IWMS are (in alphabetical order):

Relative to VMS, which has been supporting the management of agency temps or SOWs/managed projects-outcomes that are delivered under service agreement by staffing supplier businesses, IWMS is a different model that is geared to enable work arrangements between a given business and the individual independent workers that the business engages.

In the past, these engagements have tended to be executed--relatively directly--between managers in the business and the specific independent worker, leaving lapses in workforce visibility, utilization, and control of worker classification, payment, other exposures, etc. IWMS presents itself as a solution to these shortcomings, while preserving high degrees of direct self-service for selection, speed of resource deployment, and independent worker relationships.

The lowest common denominator of these IWMS model offerings is a viable platform technology (an enterprise/SaaS system ) that a business can use to initiate, manage, complete, track and analyze engagements with individual independent workers who can be identified through their profiles on the system as approved members of that business’ (independent worker) talent pool.

Among the IWMS offerings today, it seems possible in some cases for a business to use only the platform technology (as a system or tool), leaving the business to ensure that all additional compliance and sourcing requirements are met either by the business themselves or through an arrangement with 3rd parties. However, even in these cases, the platform provider may offer additional services, such as: sourcing access to the platform provider’s open or curated “labor marketplace” or additional services for compliance management of workers (including classification, employer-of-record or agency-of-record services, payment/payroll services, et al). The various independent workforce management solution offerings seem to vary in terms of the extent to which such services are bundled with the platform technology or may be offered separately as options. In some cases, these services may be delivered directly by the platform provider itself (for example, through a captive subsidiary). In other cases, the services may be delivered through the platform provider’s specialized partners.

How these emerging IWMS offerings fit into and integrate with existing contingent workforce management processes/MSPs and VMS seems to be a work-in-progress at this stage of the game. Possibly a big issue in working with large enterprises with established contingent workforce management programs, this may, however, be less of an issue in the mid-tier of businesses or among SMBs that may be heavier users of independent workers and may be open and attracted to such platforms that can support (or effectively provide 3rd party services for) proper classification/treatment/payment of those workers (whether any given independent worker will be classified/treated/paid as an 1099 independent contractor or as a payrolled W2).

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Andrew is an SIA Affiliate Analyst, covering online staffing, the human cloud and other areas of staffing technology. He has an extensive background as an analyst, manager, and consultant at the intersection of IT and services industries, and holds an MS in Quantitative Policy Analysis from Carnegie Mellon University. Additionally, Andrew is Principal and Chief Analyst of The Research Platform.

The opinions expressed are those of Andrew Karpie and do not necessarily reflect the view of Staffing Industry Analysts.

Staffing Industry Analysts is the global advisor on contingent work. Known for its independent and objective insights, the company's proprietary research, award-winning content, data, support tools, publications, and executive conferences provide a competitive edge to decision-makers who supply and buy temporary staffing.